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Chapter 5 –Total Quality Management

Operations Managementby

R. Dan Reid & Nada R. Sanders3rd Edition © Wiley 2007

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Learning Objectives Explain the meaning of TQM Identify features of the TQM philosophy Describe the four dimensions of Quality Identify the costs of Quality Identify tools used for solving Quality

problems Quality awards and Quality certifications Identify Quality leaders and their

contributions

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What is TQM? Meeting quality expectations as

defined by the customer

Integrated organizational effort designed to improve quality of processes at every business level

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Defining Quality – 5 Ways Conformance to specifications

Does product/service meet targets and tolerances defined by designers?

Fitness for use Evaluates performance for intended use

Value for price paid Evaluation of usefulness vs. price paid

Support services Quality of support after sale

Psychological e.g. Ambiance, prestige, friendly staff

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Manufacturing Quality vs. Service Quality

Manufacturing quality focuses on tangible product features Conformance, performance, reliability, features

Service organizations produce intangible products that must be experienced Quality often defined by perceptional factors

like courtesy, friendliness, promptness, waiting time, consistency

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Evolution of TQM – New Focus

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TQM Philosophy – What’s Different?

Focus on Customer Identify and meet customer needs Stay tuned to changing needs, e.g. fashion styles

Continuous Improvement Continuous learning and problem solving, e.g.

Kaizen, 6 sigma Quality at the Source

Inspection vs. prevention & problem solving Employee Empowerment

Empower all employees; external and internal customers

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TQM Philosophy– What’s Different? (continued)

Understanding Quality Tools Ongoing training on analysis, assessment, and

correction, & implementation tools Team Approach

Teams formed around processes – 8 to 10 people

Meet weekly to analyze and solve problems Benchmarking

Studying practices at “best in class” companies Managing Supplier Quality

Certifying suppliers vs. receiving inspection

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Four Dimensions of Quality

Quality of design Determining which features to include in the

final design Quality of conformance to design

Production processes are set up to meet design specifications

Ease of use Instructions, operation, maintenance, safety

Post-sale service Responsiveness, rapid repair, p.m., spare parts

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Cost of Quality Quality affects all aspects of the

organization Quality has dramatic cost implications

of; Quality control costs

Prevention costs Appraisal costs

Quality failure costs Internal failure costs External failure costs

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Cost of Quality – 4 Categories

Early detection/prevention is less costly May be less by a factor of 10

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Ways of Improving Quality Plan-Do-Study-Act Cycle (PDSA)

Also called the Deming Wheel after originator Circular, never ending problem solving process

Quality Function Deployment Used to translate customer preferences to

design

Seven Tools of Quality Control Tools typically taught to problem solving teams

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PDSA Details Plan

Evaluate current process Collect procedures, data, identify problems Develop an improvement plan, performance

objectives Do

Implement the plan – trial basis Study

Collect data and evaluate against objectives Act

Communicate the results from trial If successful, implement new process

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PDSA (continued)

Cycle is repeated After act phase, start planning and repeat

process

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QFD Details Process used to ensure that the product

meets customer specifications

Voice of theengineer

Voice of the

customer

Customer-basedbenchmarks

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QFD - House of Quality Adding trade-offs, targets & developing

product specifications

Trade-offs

Targets

TechnicalBenchmarks

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Seven Problem Solving Tools

Cause-and-Effect Diagrams Flowcharts Checklists Control Charts Scatter Diagrams Pareto Analysis Histograms

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Cause-and-Effect Diagrams

Called Fishbone Diagram Focused on solving identified quality problem

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Flowcharts Used to document the detailed steps in a

process Often the first step in Process Re-Engineering

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Checklist Simple data check-off sheet designed to

identify type of quality problems at each work station; per shift, per machine, per operator

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Control Charts Important tool used in Statistical Process

Control – Chapter 6 The UCL and LCL are calculated limits used

to show when process is in or out of control

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Scatter Diagrams A graph that shows how two variables

are related to one another Data can be used in a regression analysis

to establish equation for the relationship

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Pareto Analysis Technique that displays the degree of importance for each

element Named after the 19th century Italian economist Often called the 80-20 Rule Principle is that quality problems are the result of only a few

problems e.g. 80% of the problems caused by 20% of causes

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Histograms A chart that shows the frequency distribution of

observed values of a variable like service time at a bank drive-up window

Displays whether the distribution is symmetrical (normal) or skewed

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Quality Awards and Standards

Malcolm Baldrige National Quality Award

The Deming Prize ISO 9000 Certification ISO 14000 Standards

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Quality Awards and Standards

Malcolm Baldrige National Quality Award (MBNQA)

The Deming Prize ISO 9000 Certification ISO 14000 Standards

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MBNQA- What Is It? Award named after the former Secretary

of Commerce – Reagan Administration Intended to reward and stimulate quality

initiatives Given to no more that two companies in

each of three categories; manufacturing, service, and small business

Past winners; FedEx, 3M, IBM, Ritz-Carlton Typical winners have scored around 700

points

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The Deming Prize Given by the Union of Japanese Scientists

and Engineers since 1951

Named after W. Edwards Deming who

worked to improve Japanese quality after

WWII

Not open to foreign companies until 1984

Florida P & L was first US company winner

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ISO Standards ISO 9000 Standards:

Certification developed by International Organization for Standardization

Set of internationally recognized quality standards

Companies are periodically audited & certified ISO 9000:2000 QMS – Fundamentals and Standards ISO 9001:2000 QMS – Requirements ISO 9004:2000 QMS - Guidelines for Performance More than 40,000 companies have been certified

ISO 14000: Focuses on a company’s environmental

responsibility

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Quality Gurus Figure 5-10 summarizes the contributions

of the seven Quality Gurus Walter A. Shewhart W. Edwards Deming Joseph M. Juran Armand V. Feigenbaum Phillip Crosby Kaoru Ishikawa Genichi Taguchi

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Why TQM Efforts Fail Lack of a genuine quality culture

Lack of top management support and commitment

Over- and under-reliance on SPC methods

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Chapter 5 Highlights TQM focuses on serving the customer’s quality

needs TQM uses continuous improvement, quality at the

source, employee empowerment, quality tools, teams, benchmarking, and supplier certification

Four dimensions: product/service design, conformance, easy of use, post-sale support

Quality costs; prevention, appraisal, internal & external failures

QFD and Seven Quality Tools used in managing quality

The MBNQA, Deming Prize, and ISO Certification help focus on quality improvement and excellence

The seven Quality Gurus all made key contributions

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Chapter 5 Homework Hints This is not required, but for extra credit! Research on TQM:

Internet probably best, but library OK. Link on my website:

http://www.csus.edu/mgmt/blakeh/www.html Find an article that tells how a firm uses

one (or more) of the quality concepts in Chapter 5.

Write a summary of the article: One page—single space paragraphs, double

space between paragraphs. Give the source, like in a bibliography.